tv Nightly Business Report PBS September 3, 2014 1:00am-1:31am PDT
this is "nightly business report" with tyler mathisen and susie gharib. >> a september to remember, a big week on the data front could determine how soon the federal reserve might raise interest rates and which way stocks could hit. >> hollywood cyber attack. celebrity photos stolen and published by hackers. how safe is your data and how to make it more secure. >> and beyond lipitor. how to get the next blockbuster cholesterol drug. this and more for "nightly business report" for tonight, tuesday, september 2nd. good evening, everyone. welcome, just like that, it is the unofficial end of another terrific summer. vacations are over, including mine. the beach chairs and umbrellas get put away and the kids head
back to school and college football kicked off and the nfl follows on thursday. on wall street, it is september. historically, one of the roughest months for stocks, but does that mean anything to investors right now? the markets just wrapped up the best august in 14 years and the current bull market is now more than 2,000 days old and counting. so, as the days get shorter and leaves change this month, where do the markets go from here and what will trigger the next moves up or down? dominic chu as more. >> reporter: traders call it the september swoon. since 1 950 they yielded the post caps per year. with stocks sitting near record high levels, many are left wondering whether we're due for the long-awaited pull back from the market. >> when we look at this environment, the higher we go, the higher the stakes become.
investors want to be cautious. >> reporter: the last time we saw a big market drop was back in 2011. and these kdays, there are risk associated with the markets. tensions between russia and ukraine, islamic militants between iraq and syria and indicators in places like europe and china. those are among many reasons why a deeper pull back in stocks is in the works. >> i think the sidelines for the retail investors is probably the best bet. if you're involved, stay the course but be prepared to reduce quickly. >> reporter: the september story isn't all doom and gloom. over the last five years, the s&p many 500 has posted an average 2% gain during the month of september. consumer discretionary, tech and industrial stocks helped lead the way higher. that's why others think longer term investors may want to keep adding to the investments on a regular basis.
>> i think any pull backs you have here would certainly be buying opportunities, but frankly, if you're a three to five-year investor or two-year investor, if you sit and wait, the pull back may never come. the only way around that, frankly, is to average in. >> both sides offer compelling cases but for history fans, it's which scenario they want to believe more. for "nightly business report", i'm dominic chu. stocks ended lower but not by much in spite of upbeat economic reports on and construction manufa spending. the energy was the worst performer after crude fell more than $3 closing below $93 a barrel. as for stocks, the dow lost 30, the nasdaq up nearly 18 and the s&p hit an all-time intra day high was up by one point. >> it's a big week for data and the biggest number of all comes
friday when the labor department releases the august jobs report. it's arguably the one number janet yellen and her fellow fed policy makers will study closest as they decide when to raise interest rates and by how much. steve liesman dives into the week's day to highlights. >> reporter: it's a big week in the united states for jobs data and that means a big week for wall street to figure out whether the federal reserve could hike interest rates sooner. the first piece is the adp private payroll company, which is expected to forecast a 215,000 private sector payroll jobs in august. the claims seen in a relatively low 300,000 and friday the big number seen at 220,000 or the seventh month in a row above 200,000. the unemployment rate is forecast to climb by 1/10th, average wages up .2% from unchanged. fed chair janet yellen, if the improvement is more rapid than
the fed anticipates, it could move up the timetable. >> we're in the view of the summertime, but the most questions we're getting is, you know, could it be earlier? could it be -- particularly, people have their eye on the march meeting of next year as a possibility, again, conditional on the jobs numbers looking, you know, good over the remainder of the year. >> reporter: key areas to watch in audition to jobs, the labor force is up by 200,000 as more people are attracted back into the stronger labor market. people working part time for economic reasons up a small 22,000 over the past three months and real wages, well, after adjusting for inflation, they are up .02%. that's a number yellen thinks can be much higher. what would it take for earlier rate hikes? >> i think we have to see, you know, perhaps unemployment down
more than just a tick, two ticks or so and we also have to see, you know, evidence of wages really starting to pick up. >> a rate hike three months earlier than planned isn't a big deal. what would matter is the fed gets more aggressive so it ends 2015 at a higher rate than wall street anticipates. by friday, the markets should know if the data from august shows the job markets yielding more quickly than expected. that would prompt the feds to take a tougher stand on rates. for "nightly business report", i'm steve liesman. >> jonathan is calling for the s&p 500 index to hit 2075. he's chief u.s. market strategist. jonathan, by my quick k calculations, if you're right the s&p could be up by more than 12%. a lot of risks, worries, fears, what are you seeing that makes you so upbeat? >> well, i mean, if you look at
this year's performance, the returns in the market, it's all driven by earnings. this is not speculation. it's not a market that's higher because simply someone is willing to pay more than the guy before. this is a market that's giving you in returns what companies are delivering earnings and that's a very healthy thing right now, and interest rates where they are means that you really do have the potential for stocks to go much higher. >> tell me why bull markets end, and do you see anything out there that would end this one? >> it's a great question. bull markets end really when you get towards your next recession. they don't get tired, and frankly, they don't get expensive. politics doesn't matter as much as we would like to think and the key is is that the risks of recession right now seem quite remote. what you really need to see is a meaningful pickup in inflationary pressures that forces the fed, almost scares the fed into acting more
aggressively than they want and we're nowhere near that right now. >> jonathan, are you saying that you're just going the way you've been going all summer long, all year long the same investment strategy or here it is september, back to business. are you making any changes in your portfolio or investment approach? >> for the most part, the answer is no. you need to have a reason to want to change and what we're seeing is an economy growing at a nice clip, but not, you know, too fast. corporate profits, which are surprising to the upside and evaluations which seem quite reasonable. no, we like the same sectors that we've liked before and we think investors are really going to be well-served to stay in the market not just for september but the next couple years or longer. >> what sectors are those that you like best? >> the three that stand out, the first one is financials. if we get, as we and most expect, a rise in interest rates from here and i'm not talking
about something huge but inex a inextra -- financials are big. as the economy progresses, industrials are the big winner on and that and the other standout is health care, which is doing really well and we think given the growth prospects should do well especially biotech stocks. janet yellen hasn't been a fan but an area you can really find growth at a high valuation but a reasonable valuationle given th growth. >> you have a very bullish forecast. you're not worried about politics or the fed. what is the wild card? could upset your upbeat scenario? >> probably the single thing that would make me more concerned is if we did see inflationary pressures start to spike up, and we know that the fed is printing money. we know that they are trying to slow the process down right now, and eventually raise rates, but
if the fed say inflationary pressures were really picking up, they would be forced to leap frog the process, jump further ahead and that would be upsetting. we're not there now but it's a single thing i'm keeping an eye on. >> thank you so much. home depot is the latest big name retailer dealing with a possible breach of customer credit card data. the world's biggest do it yourself chain confirms it is working with law enforcement and banking partners to explore unusual activity and says quote if we can confirm a breach has occurred, we will make sure that customers are notified immediately end quote. meanwhile, a breach of another kind at apple. after intimate photos of celebrities including jennifer lawrence and kate upton were hacked and posted. how safe is anything you store in your computer or in the cloud? julia boorstin has more. >> reporter: apple investigated the high-profile hack attack and
said it found the photos were not due to the breach of any of apple's systems including i cloud or find my iphone. certain celebrity accounts were targeted on attack it is on names, passwords and security questions, a practice too common on the internet. >> apple needs to do three or four things, one, show care and concern for celebrities who had phones hacked and data hacked. second, use any and all social media channels they can to send out information to their fans and three, actively investigate. >> reporter: apple says it's continuing to work with law enforcement to identify the criminals. all users use a strong password and enable two-step verification. this demo of google shows how users are sent a code that frequently changes to another device. it must be entered in audition to a password. that step can block hacking
software that repeatedly gets passwords. we can expect storage companies to strongly encourage two-step verification and more complex security codes. >> we got a balancing act between the user's desire for security, versus, the desire for convenience. something secure isn't necessarily convenient and i think that what has been happening over the past couple months with these breaches of credit cards, of photos, of documents, i think you'll find consumers more than willing to go through the extra steps. >> reporter: so consumers would face more headaches as they try to remember the new, tougher passwords. for "nightly business report", i'm julia boorstin. tim ryan joins us now to discuss important ways consumers and businesses can protect themselves against hackers. he's the head at the risk
advisory firm. tim, welcome. good to see you. >> thank you. >> do you think this attack on these celebrities' data was a rogue that got the user name and passwords or does it suggest a deeper problem, which apple says it is not, a deeper problem with data that are stored on the cloud? >> well, i think it is a deeper problem with data that's stored on the cloud in that when somebody can purport to be somebody they are not and get access to the victim's data, that's a deeper cloud problem. that is not an individual problem. >> you know, there was a time, tim, that people were really very worried to put any private information to make a purchase on the internet and now we all do this. do you think that part of the problem is we've become too trusting, too lose, whether apple or amazon or google or twitter? >> i think that we have, it's become so common place to put data on the cloud, as you said,
people are not looking at the security implications of doing it. that said, i think in the next five years, almost all our data will be in the cloud. so i don't think we'll be able to walk back from this part. >> what i'm hearing you say here is that the fact that they got the user name, able to crack the password, that gave them access to stuff that was secured on the cloud, so it's really kind of a distinction without a difference, whether the problem was with the cloud or the phone itself. in the piece that julia just did, she showed one way to protect or sort of do a belt and suspenders approach to your password, and that is a second verification or second authorizing. will people go for that, where you get another message sent to you to a separate device or is that too much of a trouble system thing to do? >> no, i think it can become part of a normal security practice. when high net worth individuals come because they have concerned about stuff like this, we always
recommend two-step verification. these cloud providers, they can mandate the use of two-step verification so that becomes more wide spread. >> real quickly, if you run a small business or medium-sized business aum you continue have a huge it department to help, any important piece of advice you can give business owners how to protect their data? >> sure, if you're storing data in the i cloud today, you must immediately change your passwords. if you have the ability to use two-factor aught thverification should use it. >> does two factor make it harder to crack? is it different from one factor verification. if you can beat me on this, why can't you beat me on the one the company sends? >> most require that the second factor go to like a cell phone
so the bad guy would have to both steal your password and steal your cell phone. >> i see. thank you very much. very helpful. >> thank you. and coming up, the $10 billion bet by companies hoping to rollout the next lipitor. that's next. eric cantor is hitting the street, wall street. the former house majority leader that lost the election to a tea party challenger back in june has joined investment firm as vice president and managing director and he will be elected. he resigned from the virginia seat last month. two energy giants are paying a hefty price for their roles in
two separate disasters. they were fined $1.4 billion by a panel of california judges for a 2010 gas pipeline blast and fire that killed eight people outside san francisco. in a separate settlement, halliburton was ordered to pay $1.1 billion for its role in the 2010 deep water horizon oil spill off the gulf, in the gulf of mexico. that money will go into a trust that's used to compensate victims. the so-called dollar store bidding war is heating up and that's where we begin tonight's market focus. dollar general upped the bid for family dollar to $80 a share and offer to divest stores. last month, family dollar rejected the earlier bid saying it would stick with the deal to be acquired by dollar tree. shares of all three chains were higher today. here is another deal update, this one on the possible
t-mobile and illiad merger. t-mobile could have a take over bid from francis iliad. it's in talks with potential partners that could team up with the company on the bid. shares of t-mobile rose 1% today to $35.43. norwegian cruise line is pushing into the luxury travel sector. it's spending $3 billion to buy high-end cruises. the deal will give norwegian access to prestige ships to help compete with places like royal caribbean. stocks surged higher. the software company compuware said it will be acquired by toma bravo. the software is used by companies like cisco systems and domino's pizza to manage complex
applications like ordering a pizza. it closed at $10.59. 1800-flowers hopes you want to send gourmet food with the roses. the company is buying harry and david, known for specialty foods, lovely fears and more. more than $140. the online flower retailer saw shares surge 16% to $5.98 and nba mvp kevin durant is resigning with nike turning down advances from under armor. the ten-year deal would be worth $300 million or more but under armor didn't lose out. it turned around and signed the brazilian model gazelle, wife of tom brady to a long-term contract. shares of nike up, under armor jumping 4% to $71.13. we all know about lip tore, the anti cholesterol medication
that is the best-selling drug ever but lipitor might not be enough leading to a class of drugs beyond lipitor rushed to the market now. meg terrell has the story. >> reporter: as many as 17 million people in the u.s., europe and japan has high cholesterol not helped by stat tablets and there is a race to address the market. the experimental medicines are inhibitors that aim levels of bad cholesterol. >> it's an enzyme involved in the metabolism and so by inhibiting it, the changes the way cholesterol is metabolized. >> reporter: leading the pack is partnered with french drug maker sanafee. they will battle between a $10 billion market. amgen said it applied for approval in europe and said last
week it applied with the fda here in the u.s. new data over the weekend at a european cardiology conference and expected to apply for approval. for these drug makers, it's a high-stakes race. >> i think everybody would like to think this is a winner take all race and i don't think that's the way it is. if you think of the stclasses, there is plenty of room and we're competitive. >> reporter: one difference, they are injected rather than taken as pills. >> we do think that will hinlder the uptake. it does seem like general practitioners, people who typically treat patients with high cholesterol would rather give a pill. >> reporter: that may reserve the drugs for sicker patients. still, the market may broaden if they don't slower the cholesterol. as for getting to the market,
the leaders are neck and neck. amgen applied for approval, there was a surprise move that purchased a priority voucher that gives a six-month review versus standard ten. it's anybody's game. for "nightly business report", i'm meg terrell. coming up, some of atlantic city's casinos start shutting the doors taking thousands of jobs with them. what is next for the struggling city by the boardwalk? opening statements began in detroit's bankruptcy trial. at stake, whether billions of dollars in debt can be restructured and at the heart of the contested plan, pensioners
would be paid more than the we've been telling you about atlantic city and today the casino shut the doors after two years in business. it is the third casino to fold in the struggling gambling mecca. morgan brenham looks what is next for the city and the famous boardwalk. >> reporter: it's the end of summer and in atlantic city, the end of an era as the show boat casinos close down. >> it's so emotional. i think it's sure real. i don't know if it hit me. >> when you lay people off, crime comes. >> reporter: more than 5,000 jobs were lost labor day weekend and when trump plaza closes later this month, another 1100 will be unemployed. factoring in third-party vendors, 7,400 positions will be lost, a quarter of the casino related jobs. >> we'll be filing for
unemployment this week just like almost everyone. >> reporter: new jersey's labor department says this is one of the largest mass filings for unemployment in state history, so large that official haves rented out the convention center to host resource fairs. >> the hopes here in the center is to get people through the unemployment process, food bank, anything these people need, we need to help them. >> reporter: it will have ripple effects, tax revenue from the three properties accounted for roughly 15% of the budget. rebalancing, will mean cutting back on hundreds of city jobs. >> the hope is once trump plaza closes, ac's remaining casino supply will stabilize and regain profits. this should be the last casino closure for at least two years as revenue from here, the show boat shifts to other local properties like herras. >> there is no question the gaming in the regional areas have had a negative impact.
we feel that the remaining casinos resorts, in particular, those that have invested in the property over the years will do very well in the future. >> reporter: as the city scrambles to reinvent, officials are aggressively targeting business, an industry he expects to grow by 100% and perhaps the most innovative new concept is by the chelsea, the high-end non-gaming hotel in nearly 40 years with legislation sbh introduced, he hopes to rollout a boutique gaming floor, a very different model. >> we would run the gaming floor like a velvet rope nightclub. the guests would have admission to the space. other friends of theirs would have admission to the space, but it could be a completely different paradigm for gaming. >> reporter: they hope to attract urban young professio l professiona
profession the same de rebel tried to cater to. sources say they are in active discussions and not necessarily to be used with casinos. the hope is the project will be announced before the year is out. for "nightly business report", i'm morgan brennan in atlantic city, new jersey. >> that is "nightly business report" for tonight. i'm susie gharib, thanks for watching and welcome back, tyler. >> i'm tyler mathisen. thanks for joining us. have a great evening, everybody, and we hope to see you back here.
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